Winning the AI Race
Junjie Guo and Ananth Seshadri
Executive Summary:
Wisconsin is already part of the AI buildout. Of a $46 billion announced pipeline, at least $36 billion is operating, under construction, or committed. The larger opportunity extends beyond the campuses: Wisconsin manufacturers have reported at least $1.6 billion in related orders and backlog and are supplying projects across the country.
Power is the binding constraint. The Public Service Commission projects Wisconsin peak demand rising from 14.2 gigawatts in 2026 to more than 20 gigawatts by 2032, with three large data centers accounting for roughly 72 percent of the increase. Wisconsin will need new generation and transmission. The customers driving that demand should bear the resulting costs.
The Public Service Commission’s April2026 order is a substantial protection, but not a durable statewide rule. If the order were weakened or comparable protections were not extended statewide, one-quarter of the costs of serving the new data centers could land on other customers instead: about $1.3 million a year for a manufacturer using 100 gigawatt-hours a year, and $8 to $10 a month for a typical household served by the affected utility. Those figures assume that 40 percent of the utility’s new spending serves data centers; at 25 percent they drop to about $0.8 million and $5 to $6. Actual allocation across customer classes would depend on Commission rate design. State law should apply one full-cost framework across utility territories while preserving competition in the supply of new power.
A two-year statewide moratorium would give up investment without fixing the underlying rules. The identified pending and paused pipeline is $9.6 billion, including $8 billion in Janesville. If half of that investment were permanently displaced, Wisconsin would forgo roughly $0.2 billion to $1.2 billion in value added over ten years, depending on the Janesville referendum. A moratorium would not itself establish full-cost tariffs, change transmission cost allocation, reform tax treatment, or improve disclosure.
The equipment exemption has become a major tax expenditure. The Legislative Fiscal Bureau projects $1.5 billion in forgone state sales tax during construction and $369 million annually once four certified projects operate. Wisconsin should keep every commitment already made, end new project-specific certifications, and move future relief into broad, predictable tax rules available across the economy.